18. Joe owns 1,000 shares of Reno Corporation common stock which he purchased in 20X6 for $10,000.On 5-30-X9 he purchases an additional 300 shares for $2,000. On 6-20-X9 he sells the original 1,000shares for $7,000. On 7-15-X9 he purchases 450 shares of Reno Corporation stock for $5,000. What isJoe's recognized gain or loss as a result of the sale of the stock and what is the basis of the sharespurchased on 7-15-X9, respectively?c. $ 750 loss; $6,350 basisI have the correct answer, but I do not know how to get there.

Shares when sold profit is calculated by subtracting it's cost.

Answered: cognized gain or loss as a result of…

Business

Accounting

cognized gain or loss as a result of the sale of the stock and what is the basis of the shares

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

18. Joe owns 1,000 shares of Reno Corporation common stock which he purchased in 20X6 for $10,000.
On 5-30-X9 he purchases an additional 300 shares for $2,000. On 6-20-X9 he sells the original 1,000
shares for $7,000. On 7-15-X9 he purchases 450 shares of Reno Corporation stock for $5,000. What is
Joe's recognized gain or loss as a result of the sale of the stock and what is the basis of the shares
purchased on 7-15-X9, respectively?
c. $ 750 loss; $6,350 basis
I have the correct answer, but I do not know how to get there.

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